An Economic analysis that evaluates the cost of alternative buildings and building components.

Overview

According to the Department of Energy's (DOE) Federal Energy Management Program website on the Building Life-Cycle Cost (BLCC) Programs, "BLCC conducts economic analyses by evaluating the relative cost effectiveness of alternative buildings and building-related systems or components. Typically, BLCC is used to evaluate alternative designs that have higher initial costs but lower operating costs over the project life than the lowest-initial-cost design. It is especially useful for evaluating the costs and benefits of energy and water conservation and renewable energy projects. The life-cycle cost (LCC) of two or more alternative designs are computed and compared to determine which has the lowest LCC and is therefore more economical in the long run. BLCC also calculates comparative economic measures for alternative designs, including net savings, savings-to-investment ratio, adjusted internal rate of return, and years to payback.

The software can evaluate Federal, state, and local government projects for both new and existing buildings. While BLCC is oriented toward building-related decisions, it can be used to evaluate alternative designs for almost any project type in which higher capital investment costs lower future operating-related costs."[1]

The DOE's Energy Efficiency and Renewable Energy Program states that BLCC "provides comprehensive economic analysis of proposed capital investments that are expected to reduce long-term operating costs of buildings or buildings systems. BLCC5 and BLCC4 are the main programs in a set of six National Institute of Standards computer programs that are especially useful for evaluating energy and water conservation projects in buildings. The programs calculate Lowest Life-Cycle Cost, Net Savings, Savings-to-Investment Ratio, Adjusted Internal Rate of Return, and Payback Period. The recently released BLCC5 is a windowed version of the DOS-based BLCC4. It contains modules to evaluate agency-funded projects according to 10CFR436A and projects that are financed through ESPC or utility contracts as directed by Executive Order 13123. The remaining modules, now in BLCC4 (for DoD military construction projects, OMB projects, and private-sector projects including taxes and financing) will be programmed into BLCC5 in the next few years. The LCC method in both programs complies with the standard practices on building economics of the American Society for Testing and Materials (ASTM) and with NIST Handbook 135, Life-Cycle Costing Manual for the Federal Energy Management Program (95 ed.)."[2]